Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Apache Corp., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
- Debt to Equity Ratio
- The debt to equity ratio exhibited a gradual increase from 0.26 in the first quarter of 2012 to 0.39 by the end of 2012. It maintained relative stability through mid-2013, fluctuating between 0.29 and 0.39. Starting in 2014, the ratio began an upward trend, reaching 0.43 by the end of that year. The ratio escalated notably during 2015, rising from 0.58 in the first quarter to a peak of 3.42 in the final quarter, indicating a substantial increase in debt relative to equity. In early 2016, the ratio decreased sharply but remained significantly elevated compared to earlier years, settling around 1.17 to 1.22 in mid-2016.
- Debt to Capital Ratio
- The debt to capital ratio followed a similar pattern, starting at 0.21 in early 2012 and gradually increasing to 0.28 by mid-2012. Thereafter, it held steady around the 0.23 to 0.28 range until early 2014. From 2014 onward, the ratio rose incrementally, reaching 0.37 by the first quarter of 2015. A more pronounced increase occurred in 2015, with the ratio climbing to 0.77 by the last quarter. In 2016, there was a correction downward to approximately 0.54 to 0.55, but the ratio remained elevated compared to the earlier periods.
- Debt to Assets Ratio
- The debt to assets ratio began at 0.15 in the first quarter of 2012 and increased steadily to 0.20 by the end of 2012. This ratio remained mostly stable around 0.16 to 0.20 through 2013 and early 2014. From mid-2014, it exhibited an upward trend, reaching 0.32 by the final quarter of 2015. Similar to other leverage measures, the ratio peaked in late 2015 at 0.47, indicating increased leverage in terms of company assets. Early 2016 saw a reduction to about 0.35–0.36, though this was still higher than the earlier part of the timeframe.
- Financial Leverage Ratio
- The financial leverage ratio rose modestly from 1.79 at the start of 2012 to 1.94 by year-end 2012. It then remained fairly constant through mid-2013, fluctuating around 1.83 to 1.94. Starting in 2014, the ratio increased steadily to 2.29 by the third quarter of 2015. Towards the end of 2015, a substantial spike occurred, with the ratio escalating dramatically to 7.34 in the last quarter. This sharp increase suggests a significant growth in total assets relative to equity, likely driven by higher debt levels. The ratio moderated in early 2016 but stayed notably higher than in previous years, ranging between 3.32 and 3.41.
Debt Ratios
Debt to Equity
Apache Corp., debt to equity calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Current debt | —) | —) | 1) | —) | —) | 2,598) | —) | 20) | 1) | —) | 53) | 57) | 478) | 994) | 990) | 964) | 568) | 429) | ||||||
| Long-term debt, excluding current maturities | 8,719) | 8,718) | 8,777) | 8,777) | 9,676) | 9,675) | 11,245) | 10,902) | 9,674) | 9,673) | 9,672) | 10,868) | 12,297) | 11,485) | 11,355) | 10,670) | 9,670) | 7,444) | ||||||
| Total debt | 8,719) | 8,718) | 8,778) | 8,777) | 9,676) | 12,273) | 11,245) | 10,922) | 9,675) | 9,673) | 9,725) | 10,925) | 12,775) | 12,479) | 12,345) | 11,634) | 10,238) | 7,873) | ||||||
| Total Apache shareholders’ equity | 7,142) | 7,451) | 2,566) | 9,809) | 15,544) | 21,211) | 25,937) | 30,818) | 32,755) | 33,082) | 33,396) | 32,981) | 32,721) | 31,987) | 31,331) | 30,714) | 30,673) | 29,715) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Debt to equity1 | 1.22 | 1.17 | 3.42 | 0.89 | 0.62 | 0.58 | 0.43 | 0.35 | 0.30 | 0.29 | 0.29 | 0.33 | 0.39 | 0.39 | 0.39 | 0.38 | 0.33 | 0.26 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Debt to Equity, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Debt to equity = Total debt ÷ Total Apache shareholders’ equity
= 8,719 ÷ 7,142 = 1.22
2 Click competitor name to see calculations.
- Total Debt
-
The total debt demonstrates an overall increasing trend from March 2012 through the end of 2014, peaking in the fourth quarter of 2014 at approximately 11,245 million USD. Following this peak, there is a notable decline in debt levels beginning in 2015, with a steady decrease continuing through mid-2016, reaching around 8,719 million USD by June 2016. This suggests a significant deleveraging effort after 2014.
- Total Shareholders’ Equity
-
The shareholders’ equity shows a positive trend from March 2012, increasing consistently until the third quarter of 2013 when it peaks near 33,396 million USD. Post-2013, equity begins to decline steadily, with a sharper decrease starting from late 2014 and accelerating through 2015 into early 2016. By March 2016, equity falls to around 2,566 million USD before slightly recovering to approximately 7,142 million USD by June 2016. This decline reflects a reduction in book value, potentially due to losses or asset impairments.
- Debt to Equity Ratio
-
The debt to equity ratio trends upward over the period analyzed. Initially, it remains fairly moderate and stable, ranging from 0.26 to 0.39 through 2012 and 2013. Starting in 2014, the ratio begins to rise more sharply, peaking dramatically at 3.42 in the first quarter of 2016. This spike is indicative of a significant imbalance where debt levels become disproportionately high relative to shareholders’ equity. Following this peak, the ratio decreases somewhat but remains elevated at around 1.17 to 1.22 by mid-2016.
This pattern suggests increased financial leverage and possibly greater financial risk, likely driven by the substantial decline in equity more so than debt increases, given the debt trend observed.
- Overall Analysis
-
The data collectively indicate that the company experienced growth in equity and manageable debt levels up to 2013. However, deteriorating equity from late 2013 onward, combined with persistent debt levels, resulted in a sharp increase in financial leverage by early 2016. The company appears to have pursued debt reduction efforts beginning in late 2014 and continued through 2016, potentially in response to elevated leverage concerns.
These trends may reflect financial distress or strategic repositioning, with implications for risk management and capital structure. The elevated debt-to-equity ratios in 2015 and 2016 highlight increased reliance on debt financing relative to the company’s equity base, which could impact creditworthiness and investor confidence.
Debt to Capital
Apache Corp., debt to capital calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Current debt | —) | —) | 1) | —) | —) | 2,598) | —) | 20) | 1) | —) | 53) | 57) | 478) | 994) | 990) | 964) | 568) | 429) | ||||||
| Long-term debt, excluding current maturities | 8,719) | 8,718) | 8,777) | 8,777) | 9,676) | 9,675) | 11,245) | 10,902) | 9,674) | 9,673) | 9,672) | 10,868) | 12,297) | 11,485) | 11,355) | 10,670) | 9,670) | 7,444) | ||||||
| Total debt | 8,719) | 8,718) | 8,778) | 8,777) | 9,676) | 12,273) | 11,245) | 10,922) | 9,675) | 9,673) | 9,725) | 10,925) | 12,775) | 12,479) | 12,345) | 11,634) | 10,238) | 7,873) | ||||||
| Total Apache shareholders’ equity | 7,142) | 7,451) | 2,566) | 9,809) | 15,544) | 21,211) | 25,937) | 30,818) | 32,755) | 33,082) | 33,396) | 32,981) | 32,721) | 31,987) | 31,331) | 30,714) | 30,673) | 29,715) | ||||||
| Total capital | 15,861) | 16,169) | 11,344) | 18,586) | 25,220) | 33,484) | 37,182) | 41,740) | 42,430) | 42,755) | 43,121) | 43,906) | 45,496) | 44,466) | 43,676) | 42,348) | 40,911) | 37,588) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Debt to capital1 | 0.55 | 0.54 | 0.77 | 0.47 | 0.38 | 0.37 | 0.30 | 0.26 | 0.23 | 0.23 | 0.23 | 0.25 | 0.28 | 0.28 | 0.28 | 0.27 | 0.25 | 0.21 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Debt to Capital, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Debt to capital = Total debt ÷ Total capital
= 8,719 ÷ 15,861 = 0.55
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited an overall increasing trend from March 2012 to December 2014, rising from approximately $7.9 billion to over $11.2 billion. After this peak, there was a notable decline in total debt through 2015 and into mid-2016, decreasing to around $8.7 billion. This pattern indicates a phase of increased borrowing or leverage followed by a deleveraging or debt reduction strategy in recent periods.
- Total Capital
- Total capital grew steadily from about $37.6 billion at the start of 2012, reaching a peak near $43.7 billion by the end of 2012. From 2013 onward, total capital declined significantly, dropping to approximately $11.3 billion by mid-2016. This decline is especially pronounced through 2014 and 2015, indicating a substantial reduction in the capital base of the company over this time frame.
- Debt to Capital Ratio
- The debt to capital ratio rose gradually from 0.21 in early 2012 to roughly 0.3 by the end of 2014, reflecting an increase in the proportion of debt relative to total capital. Subsequently, this ratio showed a sharp increase from 0.3 to 0.77 between late 2014 and early 2016, suggesting an intensification of financial leverage. Following that spike, the ratio decreased but remained elevated around 0.54 to 0.55 in mid-2016. This indicates a period of significantly higher leverage compared to earlier years, possibly as a result of the sharp capital base reduction combined with relatively stable debt levels during this period.
Debt to Assets
Apache Corp., debt to assets calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Current debt | —) | —) | 1) | —) | —) | 2,598) | —) | 20) | 1) | —) | 53) | 57) | 478) | 994) | 990) | 964) | 568) | 429) | ||||||
| Long-term debt, excluding current maturities | 8,719) | 8,718) | 8,777) | 8,777) | 9,676) | 9,675) | 11,245) | 10,902) | 9,674) | 9,673) | 9,672) | 10,868) | 12,297) | 11,485) | 11,355) | 10,670) | 9,670) | 7,444) | ||||||
| Total debt | 8,719) | 8,718) | 8,778) | 8,777) | 9,676) | 12,273) | 11,245) | 10,922) | 9,675) | 9,673) | 9,725) | 10,925) | 12,775) | 12,479) | 12,345) | 11,634) | 10,238) | 7,873) | ||||||
| Total assets | 24,346) | 24,734) | 18,842) | 27,812) | 35,312) | 48,650) | 55,952) | 60,990) | 61,171) | 61,121) | 61,637) | 60,239) | 63,350) | 61,792) | 60,737) | 58,810) | 57,217) | 53,237) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Debt to assets1 | 0.36 | 0.35 | 0.47 | 0.32 | 0.27 | 0.25 | 0.20 | 0.18 | 0.16 | 0.16 | 0.16 | 0.18 | 0.20 | 0.20 | 0.20 | 0.20 | 0.18 | 0.15 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Debt to Assets, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Debt to assets = Total debt ÷ Total assets
= 8,719 ÷ 24,346 = 0.36
2 Click competitor name to see calculations.
The financial data reveals distinct trends in the company's debt levels, asset base, and leverage ratios over the examined periods.
- Total Debt
- Total debt displayed an initial upward trajectory from 7,873 million USD at the end of March 2012 to a peak of approximately 12,775 million USD by mid-2013. Subsequently, it generally declined, reaching around 8,719 million USD by mid-2016. This pattern suggests that the company increased its borrowings significantly in the early part of the period examined, followed by a gradual debt reduction strategy in later years.
- Total Assets
- The asset base grew steadily from approximately 53,237 million USD in early 2012 to a maximum of around 63,350 million USD by mid-2013. However, starting from late 2013, a notable descent occurred, with assets shrinking sharply to around 18,842 million USD by mid-2015. Towards mid-2016, there was a modest recovery, with assets rising again to about 24,346 million USD. This trend presents a significant contraction in asset holdings during the middle of the period, indicating possible divestitures, impairments, or market valuation changes.
- Debt to Assets Ratio
- The debt-to-assets ratio climbed gradually from 0.15 in early 2012 to 0.20 by mid-2013, reflecting a proportional increase in debt relative to assets during that timeframe. Following this, the ratio remained relatively stable, fluctuating between 0.16 and 0.20 until early 2015. From there, the ratio increased substantially, peaking at approximately 0.47 by early 2016, before slightly decreasing to around 0.36 by mid-2016. This sharp rise indicates that, despite the reduction in absolute debt figures, the sharper contraction in assets led to significantly higher leverage, raising potential concerns about financial risk.
In summary, the company experienced an expansion in both debt and assets through mid-2013, followed by a marked decrease in assets and moderate reduction in debt levels. The consequence was a substantial increase in leverage, as evidenced by the rising debt-to-assets ratio, highlighting increased financial risk exposure towards the end of the period under review.
Financial Leverage
Apache Corp., financial leverage calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Total assets | 24,346) | 24,734) | 18,842) | 27,812) | 35,312) | 48,650) | 55,952) | 60,990) | 61,171) | 61,121) | 61,637) | 60,239) | 63,350) | 61,792) | 60,737) | 58,810) | 57,217) | 53,237) | ||||||
| Total Apache shareholders’ equity | 7,142) | 7,451) | 2,566) | 9,809) | 15,544) | 21,211) | 25,937) | 30,818) | 32,755) | 33,082) | 33,396) | 32,981) | 32,721) | 31,987) | 31,331) | 30,714) | 30,673) | 29,715) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Financial leverage1 | 3.41 | 3.32 | 7.34 | 2.84 | 2.27 | 2.29 | 2.16 | 1.98 | 1.87 | 1.85 | 1.85 | 1.83 | 1.94 | 1.93 | 1.94 | 1.91 | 1.87 | 1.79 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Financial Leverage, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Financial leverage = Total assets ÷ Total Apache shareholders’ equity
= 24,346 ÷ 7,142 = 3.41
2 Click competitor name to see calculations.
The analysis of the financial data over the specified periods reveals several notable trends in the company's asset base, equity position, and financial leverage ratios.
- Total Assets
- The total assets demonstrated a general upward trend from March 2012 through June 2013, increasing from approximately 53.2 billion US dollars to about 63.4 billion US dollars. Following this peak, total assets exhibited a declining pattern starting in September 2013, dropping steadily through December 2015. This downward trend continued sharply in the first half of 2016, reaching around 24.3 billion US dollars by June 2016, indicating significant asset reduction or divestiture during this period.
- Total Shareholders’ Equity
- Shareholders’ equity mirrored a similar trajectory to total assets, growing from about 29.7 billion US dollars in March 2012 to a peak of roughly 33.4 billion US dollars by December 2013. Afterward, equity values began a steady decline, with a more pronounced decrease observed from March 2014 onwards. By June 2016, shareholders' equity had diminished dramatically to approximately 7.1 billion US dollars, reflecting substantial erosion in the company’s net asset value during these years.
- Financial Leverage
- The financial leverage ratio varied moderately between 1.79 and 2.29 from March 2012 until December 2015, indicating a relatively stable balance between debt and equity during this timeframe. However, starting in March 2016, there was a marked spike in leverage, rising abruptly to 7.34 before moderating somewhat to 3.32 and 3.41 in the subsequent quarters. This significant increase suggests a considerable rise in the company's liabilities relative to equity, possibly due to increased borrowing or reduced equity capital during the early 2016 period.
In summary, the data reflects a period of growth through mid-2013, followed by consistent declines in asset and equity values, culminating in a sharp increase in financial leverage in early 2016. These shifts may indicate strategic asset sales, capital restructuring, or financial distress factors impacting the company’s balance sheet composition and risk profile during this period.